TMI Blog2015 (6) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... section 14A in the reassessment proceedings is not legally correct since the income escaped with respect to disallowance of expenditure under section 14A to the extent of the arithmetic mistake committed in the original assessment was correctly done by the Assessing Officer as per the law. Therefore, we find no infirmity in the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is dismissed. Disallowance of expenses u/s 14A read with 80 of the IT Rules in view of the specific findings given by the ld. CIT(A) that no specific books of accounts were maintained for the investment in relation to exempt income and also non exempt income. In view of the above, we find no infirmity in the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the assessee is dismissed So far as the claim of the assessee in respect of estate expenses the assessee has not able to produce any details i.e. bills and vouchers, etc. neither before the Assessing Officer nor before the ld. CIT(A) or even before the Tribunal. In view of the above facts and circumstances, this ground of appeal raised by the assessee is dismissed. - I.T.A.Nos.2843 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e end of relevant assessment year. The Assessing Officer came to a conclusion that the income has escaped assessment to the extent of the correct disallowable amount under section 14A r.w.Rule 8D. In the original assessment order, the mistake had occurred in the computation of the total value of the assets as per balance sheet under Rule 8D. The ld. CIT(A) has further observed that the bonafide mistake crept in the original assessment order was sought to be rectified by reopening the assessment by taking the correct value of the average total value of assets at ₹ 2,25,87,366/- [Rs.22769840 + ₹ 22404892) / 2] instead of the average total value of ₹ 97213312/- [(Rs.91741179 + ₹ 102685444) / 2] taken in the original assessment which resulted into escapement of income. There is no change of opinion by the AO while reopening the assessment. On perusal of the original assessment order, the ld. CIT(A) has found that the AO has not opined on the value of the average value of the total assets and it was a simple mistake committed by the AO in the original assessment order which was sought to be rectified within permissible year of 4 years by reopening assessment. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to computation of disallowance, the ld. CIT(A) has observed as under: ...Regarding the computation of disallowance under Rule 8D(ii), the AO has already taken the figure of interest expenditure of ₹ 26,45,753/- in the original assessment for the purpose of computation of disallowance of interest portion at ₹ 85,537/-. The appellant went on appeal against the order of the AO dated 28.10.2010 in respect of disallowance of expenses under Rule 8D which was confirmed in the appellate orders of my predecessor dated 29.11.2011. It was stated by the AR of the appellant that the disallowance of expenses made u/s 14A in the original assessment was confirmed in the ITAT also. Therefore, the plea of the appellant to consider the issue of disallowance of interest expenses for the purpose of computation of disallowance u/s 14A in the reassessment proceedings is not legally correct. The income escaped with respect to disallowance of expenditure u/s 14A to the extent of the arithmetic mistake committed in the original assessment was correctly done by the AO as per the law. Hence, the grounds of appeal filed by the appellant on this issue is rejected. 9. After carefull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empt income and non exempt income. Under the circumstances, the AO has computed the disallowance of expenses under Rule 8D of the IT Rules. During the course of appellate proceedings, the AR of the appellant simply relied on the grounds of appeal without substantiating the details of the capital and reserves which were applied for making investments in relation to the exempt income. The AR of the appellant did not make a case submitting the evidences in support of its arguments and grounds of appeal except relying on the case laws cited in the grounds of appeal. However, I find from the details available in the record that the appellant has incurred huge expenditure in the form of interest expense and also other expenses for making or maintaining the investments in relation to exempt income. No separate accounts were kept by the appellant for making investments, or maintaining the investments in relation to exempt income and also non exempt income. The facts of the present case are distinguishable from the facts of the case laws cited by the AR of the appellant in the grounds of appeal. The AO has correctly relied upon the ratio of the Apex Court decision in the case of Walfort Sto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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